General Motors has dramatically reversed its recent plan to secure last-minute federal tax credits for electric vehicles, a move that’s stirring debate about corporate strategies and government subsidies in the EV industry. But here’s where it gets controversial: GM initially intended to strategize its way around the September 30 deadline for the federal $7,500 tax credit on EV leases by creating a program to benefit both dealers and customers.
At the end of last month, GM devised a clever—but contentious—scheme. Their in-house financing division would buy electric vehicles sitting in dealer inventory just hours before the tax credit expired. This maneuver was designed to claim the subsidy on tens of thousands of EVs, allowing dealers to then pass the financial benefit along to customers through lease incentives. The goal? To soften the blow dealers feared from losing the tax credit and being left with hard-to-sell EVs.
However, GM abruptly dropped the entire initiative this Wednesday, announcing, "After further consideration, we have decided not to claim the tax credit." What changed? According to a source familiar with the matter, concerns raised by Republican Senator Bernie Moreno—a former car dealer deeply involved in automotive policy—played a significant role in this decision.
This turn of events highlights a critical question: should companies be encouraged to find loopholes to benefit from government incentives, or does this undermine the spirit of these programs? And here’s the part most people miss—this isn’t just about GM. Ford took a similar approach by launching its own program before the tax credit expired, but whether Ford will continue with it remains unknown, as their spokesperson declined to comment.
The situation reveals the complex tensions between automakers, regulators, and lawmakers in the rapidly evolving electric vehicle market. Does GM’s backtrack reflect a responsible reconsideration or a missed opportunity to support dealers and customers during a challenging transition? What do you think—are these last-minute tax credit maneuvers savvy business or ethically questionable? We’d love to hear your thoughts in the comments below.
